Ernesto Ochoa Tennessee Gas Pipeline Mexico, a New Landscape - - PowerPoint PPT Presentation

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Ernesto Ochoa Tennessee Gas Pipeline Mexico, a New Landscape - - PowerPoint PPT Presentation

Ernesto Ochoa Tennessee Gas Pipeline Mexico, a New Landscape September 14, 2017 Forward-Looking Statements This presentation includes forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995


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Mexico, a New Landscape

Ernesto Ochoa

Tennessee Gas Pipeline

September 14, 2017

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SLIDE 2

Forward-Looking Statements

This presentation includes forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities and Exchange Act of 1934. These forward-looking statements are identified as any statement that does not relate strictly to historical or current facts. In particular, statements, express or implied, concerning future actions, conditions or events, future operating results or the ability to generate revenues, income or cash flow or to pay dividends are forward-looking

  • statements. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Future

actions, conditions or events and future results of operations of Kinder Morgan, Inc. may differ materially from those expressed in these forward-looking statements. Many of the factors that will determine these results are beyond Kinder Morgan's ability to control or

  • predict. These statements are necessarily based upon various assumptions involving judgments with respect to the future, including,

among others, the timing and extent of changes in the supply of and demand for the products we transport and handle; national, international, regional and local economic, competitive and regulatory conditions and developments; the timing and success of business development efforts; technological developments; condition of capital and credit markets; inflation rates; interest rates; the political and economic stability of oil producing nations; energy markets; weather conditions; environmental conditions; business, regulatory and legal decisions; terrorism, including cyber-attacks; and other uncertainties. There is no assurance that any of the actions, events or results of the forward-looking statements will occur, or if any of them do, what impact they will have on our results of

  • perations or financial condition. Because of these uncertainties, you are cautioned not to put undue reliance on any forward-looking
  • statement. Please read "Risk Factors" and "Information Regarding Forward-Looking Statements" in our most recent Annual Report on

Form 10-K and our subsequently filed Exchange Act reports, which are available through the SEC’s EDGAR system at www.sec.gov and on our website at www.kindermorgan.com.

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The Big Picture

Dramatic supply growth continues

Marcellus, Utica, Permian, Eagle Ford….. Unconventional = the “new” conventional?

Gas demand continues growth trajectory

US economy : power gen  residential / industrial  Exports : LNG; Mexico

Infrastructure impetus

New sources  new plumbing  supply to market Mexico Energy Reform

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4

U.S. becomes net exporter Industrial demand growth Less Canadian Exports to U.S. More U.S. Exports to Mexico Continued supply increases Gas-fired generation increases

Source: ICF International and Kinder Morgan Analysis

+9.6 Bcfd Res +1.9 Bcfd +20.1 Bcfd +1.5 Bcfd

  • 2.0 Bcfd

+7.7 Bcfd Ind +3.1 Bcfd

Current Key Trends

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SLIDE 5

Natural Gas Supply

5

BCF/d

Source: ICF International and Kinder Morgan Analysis

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Key Natural Gas Basins

Well-positioned connecting key natural gas resources with major demand centers

__________________________ (a) Includes KM share of non-wholly owned projects. Includes projects currently under construction.

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Demand

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Source: ICF International and Kinder Morgan Analysis

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SLIDE 8

Flow Changes

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Source: ICF International and Kinder Morgan Analysis

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SLIDE 9

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SENER Forecasts demand in Mexico to grow by 1.3 Bcfd between 2016 and 2026

Imports are forecasted to grow by 850 MMcfd between 2016 and 2026 Production in Mexico is forecasted to grow 460 MMcfd from 2016 to 2026

24 GW of renewable power generation capacity being installed between 2016 and 2030 No natural gas storage in Mexico

Mexico Supply Demand Forecast

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10

Regional Demand Growth

Noreste Noroeste Centro- Occidente Centro Sur-Sureste

Source: SENER

+440 +380 +700

  • 20
  • 230

1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

Demand (mmpcd)

Regional Demand Forecasts

Noroeste Noreste Centro-Occidente Centro Sur-Sureste

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SLIDE 11

Mexico Energy Reform

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Oil & Gas Production

Open to private investment

Electricity

More merchant generation.

Gas Transmission

Shipper direction

2014 2015 2016 2017 2018

New CENACE - Electricity Market Commences CENAGAS formed Round 0 Bidding Round 1 Bidding Additional bidding rounds CENAGAS Operating Gas Pipelines Energy Reform Authorized via change to Mexico’s Constitution Market-based gas pricing Petroleum product prices deregulated Mexico auctions pipeline capacity

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Open / Competitive Natural Gas Market

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Law Pipeline Capacity Natural Gas Supply Storage / Balancing Transparent Pricing at “Liquid” HUBS

Need all to have a successful market

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Kinder Morgan / Mexico – Strong History

13

  • Capital

Invested since 2013

  • Current

supply to Mexico

  • Authorized

Export Capacity

  • Interconnect
  • 12 Direct
  • 4 Indirect

16 3.1 667 2.9

$Millions BCF/d BCF/d

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SLIDE 14

Kinder Morgan Supply Points

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A B C D E F G HI J K L

1Capacity is based on North Baja pipeline which receives gas from EPNG 2Capacity based on Tejas, NGPL, and TGP delivery point capacities to NET Mexico

EPNG NGPL Midstream TGP Sierrita

Export Points

Capacity

North Baja 5001 Sierrita 200 Nogales 9 Willmex + Monument 187 El Fresnal 199 Douglas 117 Samalayuca + Cactus Hill 910 Border 300 Texas/Monterrey 700 Tejas to NET 7122 TGP Pemex 185 TGP Rio Bravo 320 TGP to NET 5132 NGPL to NET 5002

A B C D E F G H I J K L M N M N

STRONG CONECTIVITY

MEXICO

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Exports to Mexico

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TGP Supply Diversity

16 NET Mexico Rio Bravo Reynosa

Marcellus 19.8 Bcf/d Haynesville 6.7 Bcf/d Eagle Ford 6.4 Bcf/d Fayetteville 1.1 Bcf/d Utica 4.6 Bcf/d Barnett 3.4 Bcf/d

  • TGP touches > 42 Bcf/d of diverse shale supply basins
  • ~ 2 Bcf/d of northeast supply flows through Sta. 87
  • Average flowing supply (2017): 8.6 Bcf/d
  • Deliveries to Mexico at ~ 1 Bcf/d
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TGP Exports to Mexico

(300,000) (200,000) (100,000)

  • 100,000

200,000 300,000 400,000 1/1/2005 1/1/2006 1/1/2007 1/1/2008 1/1/2009 1/1/2010 1/1/2011 1/1/2012 1/1/2013 1/1/2014 1/1/2015 1/1/2016 Dth

Pemex Net Flows

  • 50,000

100,000 150,000 200,000 250,000 300,000 350,000 1/1/2005 1/1/2006 1/1/2007 1/1/2008 1/1/2009 1/1/2010 1/1/2011 1/1/2012 1/1/2013 1/1/2014 1/1/2015 1/1/2016 Dth

Rio Bravo Deliveries

TGP Exports to Mexico

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TGP Export ts

  • 100,000

200,000 300,000 400,000 500,000 600,000 Dth/d

NET Deliveries

TGP Exports to Mexico

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MX Import Demand vs. Import Pipe Capacity

19 2 4 6 8 10 12 14 16 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Bcf/d CA AZ West TX South TX Imports (Forecast)

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US Exports Points to Mexico

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More Supply Needed at Agua Dulce

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Growing Demand ~3 BCF/d Supply Deficit

Valley Crossing 2.6 Bcf/d (Oct-18)

Agua Dulce

NET Mexico 2.1 Bcf/d TETCO 0.3 Bcf/d

Capacity ~5.4 Bcf/d + Local Supply 1.2 Bcf/d

TGP 0.5 Bcf/d

2019 Demand 9.6 Bcf/d

LNG 2.1 Bcf/d KM Border / Mier 1.0 Bcf/d Other 1.0 Bcf/d

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Gulf Coast Express Pipeline

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Delaware Basin Midland Basin

KATY MARKETS LNG EXPORTS

Adds much needed supply into South Texas

1.8 BCF/d

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Kinder Morgan Border Expansion

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150,000 Dth/d

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Thank You